NASDAQ trading action was balanced overnight as the NASDAQ chopped sideways on elevated volume on and normal range.  Price held the Friday range during Globex, and as we approach cash open there is a slight gap down.

The economic calendar is light today and becomes more busy as the week progresses.  The US Treasury is busy today.  We have 3- and 6-month T-bill auctions at 11:30am.  There is a 3-year note auction at 11:30am, and a 10-year note auction at 1pm.

Last week buyers extended the rally that began two weeks ago.  The Dow was particularly strong.  The performance of each major US index is shown below:

On Friday the NASDAQ printed a neutral extreme up.  The day began with a gap down and sellers attempting to reject us down and out of the Thursday range.  However, after briefly going range extension down in the morning, a responsive bid stepped in.  We then spent the rest of the afternoon in a slow algo-grind higher.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7175.75.  This sets up a move to take out overnight high 7184.75.  Look for sellers up at 7200 and two way trade to ensue.

Hypo 2 sellers press down through overnight low 7150.75 setting up a move to target 7100 before two way trade ensues.

Hypo 3 stronger buyers trade up to 7235.50 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

Greetings,

It took me many hours to work through the Sunday process of building the Exodus strategy session.  Not because there was lots of information to digest but because my ADD is popping off.  Like I heard a bird halfway through the last sentence and my brain went to work identifying it as a woodpecker.  Then I looked out the window for it.  Then I came back to the computer and before you know it I was reading a Wikipedia on the cockatoo.

But the model is the model and it is nearly four years old.  Muscle memory carried me through completion and it generated a bullish bias.  There are lots of other contextual pieces to support the claim including the NASDAQ transportation index which appears to be in a new discovery phase.

The model cannot predict how investors will react Wednesday afternoon when the Federal Reserve makes their rate decision.  The gambling halls in Chicago are giving a 91.3% probability of a 25 basis points lift in the benchmark borrowing rate.  This is a live meeting and even though we all pretty much know a 25 basis point hike is to be announced, we have no idea how the markets will react to the fact.  So we use third reaction analysis to give us patience and then we go with the third reaction into the end of the week.

It really is that simple.

And most of investing and trading is simple.  The problem is, keeping things simple isn’t easy.  Our ADD kicks in.  Some friend-of-a-friend hears that the tests at some pre-revenue biotech company are going well and we buy a couple 100 shares, despite that never being part of our simple plan.  Bad dog.  Smack yourself on the nose with a newspaper.

This is my birthing week.  Perhaps that is what has me distracted.  But before then I am hosting an investor meetup downtown.  If you are around Detroit Tuesday afternoon, come hang out.  We are going to review what has happened over these last 6 months and formulate a plan for the second half of the year.  Here is a link to some more info about the event: https://www.meetup.com/Detroit-Investors-Traders-StockTwits-Meetups/events/251111628/

I am giving another talk at the end of the month during Detroit Startup week.  That one is going to be cool.  It’s at the YMCA so I may work in some deadlifts while we talk about starting small and building beautiful investments.

But for now our job is to ready ourselves to trade Monday.  Then we will prepare to trade Tuesday, and so on.  You can start by reading the Exodus Strategy Session.  Or you could take the important step of building your own research.  Both are good.  Or you can just take my word that the model is bullish and if it turns out I’m wrong you can assuage all guilt onto me.  That’s classic interneting.

Exodus members, the 186th edition of Strategy Session is live, go check it out!

WHAT:

StockTwits Detroit Merchants Row Meetup III

This is a solid event space.  Lots of room.  7th story views of iconic Woodward avenue and of a city in hyper-growth mode.  I’ll have to projector screen running to pull up charts or any other information our open discussion leads to.

WHEN:

Tuesday, June 12, 2018, 6:00 PM to 7:30 PM

DETAILS:

A gathering of minds to discuss domination of the financial markets. I managed to secure the event space at WeWork Merchants Row Tuesday, June 12th from 6:00-7:30pm because I want to bring the group together and observe how the financial markets have behaved over the last 6 months.

There will be pizza, beer, coffee, and filtered water.

This is an excellent opportunity to meet other finance professionals in the Detroit area and expand our understanding of the financial markets as a group.  Do you want to take control of your investments?  Let’s look at some of the latest tools in fintech.  Everyone has different goals and there are certain tools that may meet those needs.  We can dig right in and see what could work best.

LINK TO RSVP:

Please RSVP if you plan to attend.  It makes my planning (which I do the day of) much easier.  Here is the link:

StockTwits Detroit Merchants Row Meetup III

Tuesday, Jun 12, 2018, 6:00 PM

WeWork Merchant’s Row
1449 Woodward Avenue Detroit, MI

11 Market Enthusiasts Attending

A gathering of minds to discuss domination of the financial markets. Greetings everyone, hopefully your Memorial weekend is off to a good start. Friday afternoon I managed to secure the event space at WeWork Merchants Row Tuesday, June 12th from 6:00-7:30pm because I want to bring the group together and observe how the financial markets have behav…

Check out this Meetup →

RAUL here listen up.  I love bringing this group together.  We have diverse backgrounds and skills and it enriches all of our understanding of high finance.  Come out if you can.

NASDAQ futures are coming into Friday gap down after an overnight session featuring extreme range and volume.  Price worked down into last Friday’s range overnight after most of the week was spent working higher off the gap up into Monday’s open.  As we approach cash open price is hovering just below the Thursday low.

There are no economic events today.  However, most active trading has rolled forward to the September contract.  The price levels in this report are still in reference to the June contract.

Yesterday we printed a normal variation down.  The day began with a gap up and brief push to record highs before reversing and trading lower.  Price worked to just below the Wednesday low before a responsive bid stepped in near end-of-day and pushed price back to the daily mean.

Heading into today my primary expectation is for buyers to reclaim the Thursday low 7140.50 setting up a move to close the overnight gap up to 7164.75 before two way trade ensues.

Hypo 2 sellers reject a move up through 7140.50 setting up a move down through overnight low 7077.75.  Look for buyers down at 7062.50 and two way trade to ensue.

Hypo 3 stronger buyers trade us up to 7212 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures traded higher overnight, extending upon the record highs achieved Wednesday during a globex session having normal range and volume.  As we approach cash open price has drifted lower, and we are coming into the open with a slight gap down.  At 8:30am initial/continuing jobless claims data came out mixed.

Also on the economic calendar today we have consumer credit at 3pm.

Yesterday we printed a neutral extreme up.  The day began flat and with sellers pushing into the tape.  Said sellers pushed us range extension down very briefly but were unable to take out the Tuesday low.  Instead we traversed the entire daily range, putting us into a neutral print.  Then buyers became initiative in the afternoon and rallied the market into the close, ending the session near the high.

Neutral extreme up.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7215.  From here we continue higher, up through overnight high 7234.25 before two way trade ensues.

Hypo 2 sellers trade us down to 7193.75 before two way trade ensues.

Hypo 3 stronger sellers trade us down to 7166 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Wednesday flat after an overnight session featuring normal range and volume.  Price worked higher overnight, nearly achieving a record higher before settling into two-way trade.  At 8:30am trade balance data was better than expected.

The only other economic event today is crude oil inventories at 10:30am.

Yesterday we printed a neutral day.  You have to squint to notice that we briefly went range extension up in the late morning before responsive sellers stepped in and pushed us neutral, filling the overnight gap along the way.  Then buyers stepped in and returned us back through the range, nearly to session high by end of day.

Neutral, maybe neutral extreme.

Heading into today my primary expectation is for sellers to push down through overnight low 7175.50.  Look for buyers down at 7174 and two way trade to ensue.

Hypo 2 stronger sellers trade down to 7155.25 before two way trade ensues.

Hypo 3 buyers work up through overnight high 7203.75 setting up a move to target 7209.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight trading well up into the upper quadrant of the trend down that occurred March 13th.  As we approach cash open prices are hovering near Globex high.

On the economic calendar today we have ISM non-manufacturing/services composite followed by a 4-week T-bill auction at 11:30am.

Yesterday we printed a double distribution trend up.  The day began with a gap up beyond last Friday’s range and a drive higher.  This set the tone, and after some morning chop buyers extended their campaign higher before settling into a tight balance.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7148.25.  Look for buyers down at 7141.75 and two way trade to ensue.

Hypo 2 buyers step in ahead of Monday session high 7151.50 setting up a move to take out overnight high 7174.50.  Look for sellers up at 7181.75 and two way trade to ensue.

Hypo 3 stronger buyers sustain trade above 7187.25 setting up a move to target 7200.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into the week gap up after an overnight session featuring elevated range and volume.  Price worked higher overnight in a steady campaign of buying that took prices to levels unseen since mid-March. As we approach cash open prices are hovering up near overnight high.

On the economic calendar today we have factory and durable goods orders at 10am followed by 3- and 6-month T-bill auctions at 11:30am.

Last week a three-week-long stalemate broke higher.  The holiday shortened week began weak and finished strong, steadily working higher from Wednesday-thru-Thursday before going into trend up mode Friday. The performance of each major index is shown below:

On Friday the NASDAQ printed a double distribution trend up.  The day began with a gap up and drive higher out of Thursday range.  The morning was violent, with big range and sellers attempting to respond to higher prices.  However their efforts were overrun and we continued to trend higher into the afternoon, eventually coming into balance near session high and drifting into the weekend.

Heading into today my primary expectation is for sellers to work into the overnight inventory but fail to reclaim the Friday range.  Instead, responsive buyers (responsive relative to the open, initiative relative to the Friday close) step in and defend around 7091 setting up a move to take out overnight high 7120.75 before two way trade ensues.

Hypo 2 stronger buyers gap-and-go higher, sustaining trade above overnight high 7120.75 setting up a continued trend up to 7159 before two way trade ensues.

Hypo 3 sellers work a full gap fill down to 7082.25 then continue lower, down through overnight low 7071.75.  Look for buyers down at 7062.50 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

Some of you refuse to accept that your skills are being automated away by big-brained boys and girls one third your age. You can take solace in knowing that Exodus was created by a Space Alien Magician who is in fact immortal.  Nevertheless, Exodus is eliminating the need for a, umm…how do I put this, financial services professional if only you can manage to assuage the responsibility of choosing stocks to the quant.

Presented without further commentary, the performance of my quarterly quant, built exclusively with the tools inside Exodus, performing live via Motif investing for ease of implementation and return-to-date verification.

Next adjustment occurs at end-of-June.

Total annual commissions $40.00.  Total other fees $0.00.

Bye sweeties,

RAUL

Let me be the first to let you that June is a good month for active trading.  Why?  Distraction.

Summer has arrived in the economic power centers of the world.  Animals spirits are alive.  Love and lust are acting on the human spirit.  All the while ruthless capitalists are stalking their next prey.

And it really is that simple.  Either you keep your feet grounded, using whatever foundation you have for working, or you are eaten up by capitalists.

My only true friends in the battle for domination of the financial markets are raw interaction data and robots.  They are both immutable.  And with proper maintenance they equip me to be on the right side of June.

A few of you question my whole style and approach.  Believe me, I listen.  A harsh criticism can carry more insight than praise.  Do I feel anything when you call me garbage?  Not a wince.  At this level there is no room for emotion.  I need to execute. That’s all there is to it.  Thank you for even taking the time to read my work.

I realize the trade off with writing.  You are spending your time, which I consider finite and precious, examining my concepts.  This is not a responsibility I take lightly.

The models that guide my behavior are bullish into next week.  I was busy last week hustling and only traded the end of the week.  This week is different.  I am out for NASDAQs and will be working the long side of the tape.  You can work the short side.  And hopefully you find some opportunities to extract wealth while you are at it.  I will be working the long side.

Good luck out there.